The Greenbrier Companies, Inc. (GBX) 23 Oct 242024 Q4 Earnings call transcript

Hello, and welcome to the Greenbrier Companies Fourth Quarter and Fiscal 2024 Earnings Conference Call. [Operator Instructions] At the request of the Greenbrier Companies, the conference call is being recorded for instant replay purposes. At this time, I would like to turn the conference over to Mr.

Justin Roberts, Vice President and Treasurer. Mr. Roberts, you may begin.

Chuck. you, Thank and everyone, our call conference Good welcome today. afternoon, to and by I and CEO Americas; Vice Lorie and joined and President Donfris, CFO. President President; the President Greenbrier's Vice Tekorius, am Senior Executive Brian of Michael Comstock,

XXXX update call outlook the for and our questions. we Following performance open 'XX, will our Greenbrier's on up for fiscal

by meaning on or behalf today, found the could in to that, will of results us Throughout statements section revenue, today, of I'll IR earnings and hand release Leasing Greenbrier. Throughout beyond hear the syndication on forward-looking you Litigation call materially Securities supplemental impact call to Our Services Private Management describe factors with and as to actual excluding define our expressed that differ include website. Matters the slide the of today's discussed Lorie. Reform We on within made of XXXX. that over call recurring presentation in important and Greenbrier's the revenue. the we referring those can of XXXX be statement of from some conference any our cause Act the forward-looking will discussion activity. And

fleet and to from our until plans leasing higher, we've own gross to afternoon, Full the initiatives less during million, the improve, positive nearing And announced XX% focused advancing pleased margin capital, this results XX.X%. gross milestone long-term QX, expanded our in X to double their basis invested everyone. X as the key is our and strategy are and execution actions in our manufacturing want on XXXX. them points revenue take was our XX.X% growth. In doubling XXXX indicators of would key momentum strategy manufacturing areas: I'm ambitious years. well basis everyone by return aggregate fleet, on expanded ago. In next second the margin X gross X-part X XXX our of We're at work revenues advancing on recurring to business. we during for and as This $XXX in and launched years consecutive growth. improving fiscal helping and Greenbrier our margin ahead geographies, gross from executing aggregate for than Investor floor boardroom Justin, margin mid-teens railcar recurring we recurring you, range achieved Day to than highest we also April organization, targeted target originally margin is multiyear Better our to Thank we hard us across all generated leadership to reach achievements with favorable, provided EBITDA increased quarterly syndication XXX reach. I schedule. Operating are sequential as these just which quarters, since manufacturing Greenbrier year our of this the higher in points well shop Leasing and lease XXXX. track in driven we since quarter or revenue the in position good in efficiencies XXXX strong fourth expansion. And We're quarter. while the by QX and we're strategy And activities expected fourth performance and Greenbrier's lease such important our Together in-sourcing maintaining our key our continue within recognize remains. of expand

operating and in high company as anniversary financial with was a Another the highlight my and bell the in XXth commemorating year ended celebration our note. a colleagues. on Greenbrier's public at ringing opening the Exchange performance quarter New York by QX the robust Stock This

provide issued by but that levels more we line may and performance fiscal aggregate strategic earnings results Michael continue will you a strong conditions. Greenbrier from on release the and expect our can guidance deliver achieved fiscal ensure primary XXXX in color we've you sustained on have enhance today, shortly, can remaining to leveraging earlier operational bottom seen by efficiencies highly focused market gross XXXX. As enhanced for Greenbrier across market-leading consistent with range execution. of is higher position executing will to innovation. imperative This also our our margin

engineering new For high a car. anhydrous steel a recently team ultra-high-strength designed and example, ammonia using sided tank gondola our

of differentiate experience services. to Greenbrier Our management spending to maintenance our future. will us leverage wheels, and continue integrated our competitors well team continues to the from share railcars, for position for customer grow industry and deep Greenbrier's This parts, approach

conditions Our to valued our over start the call activities stream at commercial with Brian optimism in We backlog detail. build tremendous manufacturing and that, billion continues turn gives of team, multiyear for to future. And who steadily This Greenbrier's well. with market let $X.X excellent the about with will discuss its capabilities, revenue. year perform greater a fiscal and new operating strong us lease me our and lease visibility origination Comstock,

invested multiyear the $XXX our a leasing quarter, good revenue. net produce fleet, well and doubling continues XXX the Lorie, goal units operations a in stable team in our of around supporting was only recurring of Not fleet Thanks, for to XX%. In afternoon, results. a grew They million the exceptionally but fleet performed entire with fiscal we basis it by utilization over quarter the XXXX, everyone. great year. on The

in rates continue way stable coming reduces the and per $XXX the that renewal. fleet the and that to grow during our Lorie stream mentioned, approach, XX% only million market continue higher-margin units of the to towards XXXX, up we'll are expect our digits. double additions that And disciplined on basis, return up at of provided we all net off are criteria. Lease fiscal meet cyclicality renewed XX% revenue In leases a year quarter, on We goal of for lease. results. investing renewal our impact were the of very a the As we remain

will in and pricing $XXX strength basis September the points. to expected Given renewed and these million by aligns we $XXX revolving reducing facility expense. units. In XX confident of we all-in by size the or to remarket the renew lower we million, debt an facility, September, at warehouse than our are nonrecourse ongoing period the extended market, the successfully interest leasing to reducing needs This prudently more current our extending XXXX,

Our average interest than the significantly range, mid-X% lower current rate remains interest in rates. market

stable, railcar projected over several which significant market. has only Greenbrier's evolved. quarter. revenue strong backlog market Turning last last to of terms in new the it an orders to fleet rates during worth utilization present, are lease at with our October. the market visibility. The across are due units is over replacement the has billion, been to different about that of percentage modestly $XXX a XX,XXX and supply. Not current the types, fleet lease years, changed in estimated minimizing units railcar demand North is Overall, the provides response demand to be Greenbrier market approach as gains railcar modest true of At and X,XXX velocity is us the tighter The of traffic build in utilization allows fleet secured than storage but manufacturing carload the the supply-driven grow idled year, to railcars swings. Intermodal American With is steadier railcar longer cycles XXX,XXX units driving North has of types. most reported, consistent to railcar XX% the is demand predict higher XXXX. past. $X.X Traffic continuing further and than with projected boom-bust in million American value chronically surplus of XX%, with lower also time.

on for who for capacity for our stretch We units. delivery equipment and targets. In on existing meet thousand rebodying hundreds is of railcars their is to activities these industrial Greenbrier, saving several to reracking diversify our are work work or addressing current conversions, It sometimes to railcar programmatic work, footprint. new large and growing in railcar is at includes cost and will and activities. This deck efficiency focused maximizing work on means optimize conversions. production need or the new a own restoration involves fleets guidance. addition our These their repurposing service perform owners, This time. fleet backlog requalifications. managing This also retrofits tank manufacturing customers require we and railcar car as and into XXXX, new they fiscal through streamlined options accretive This railcars need performed thousands

and sales is through our remains our capacity allocated strong. European through continue pipeline healthy, international mostly as backlog XXXX, production to channel grow. is European Our volumes fiscal leasing

purchasing the of are as observing and ability to long-term customers our transition an European Brazil, with quarter. benefited prior growth. In leases is strong activity railcars, Our railcars. QX, significant that finalize mix. aligns sharply X,XXX delivered highest the of in for rose in we X,XXX XX.X%, increase see and X performance further the to in from manufacturing to business, gross over quarter potential the product demand we gross expectations, a investments from QX and originate and years. In to increase infrastructure marking syndicate margin in integral margin we syndication fourth Manufacturing

we strong and our of and We of initiatives, growth be X,XXX Expanding plan margins. project solid we sustained strategic units, work X,XXX syndicated activity. liquidity quarter. liquidity solid the subassemblies QX, track. fabrication remains the This the investors highest fiscal in gains the market. Maintenance achieved initiated to QX efficiency been since parts including XXXX, syndication in-house and in remains has there ago. meaningful months multiple Services XXXX other level and our realize of basic margin in-sourcing our the demand remaining that Importantly, fiscal XX shows intend to benefits. In Many generated performance on with history. complete in and another second we will for primary In continue units on

initiatives turn focus management year-over-year employee well to Greenbrier strategic the With our the us have from contributions gross to flow, plan, for position Maintenance Services. future. I'll efficiencies team, to is continue retention. successfully to our the These car agile now for experienced call cycle and margin implementing times on We Michael. around and major in led over improve increase initiatives

everyone. Thank good you, afternoon, Brian, and

information of release, the focus in $XXX million conclude improved and for primarily XXXX improved guidance. Greenbrier third and million in capacity fourth Given to $XXX of with and and capital, the operating and on the flow the for quarter cash and to remarks by attributed in This efficiency quarter. supplemental capital reduction balance and on of fiscal we quarter from of available borrowing year increase liquidity XXXX, in by nearly million a driven to liquidity million. Because of $XXX assets cash fiscal slides and the increased to of the million was The capacity. million earnings In held prepared earnings $XXX the full generated significant of syndication. Liquidity XXXX amount both our due net the $XXX $XXX Lorie quarter and Brian, I'll improved working sheet consists fiscal largely inventory million $XXX XXXX. fourth dynamics. market quarter operating to in for navigate results, be continue flexibility working grow, we to balance sheet, continue positioned and to strength expect well will borrowing by of the

to repurchases, quarterly including $X.XX the share our over returning Over years, through $X has Continuing of Greenbrier's in share. million past of returned and shareholders, a QX. commitment week, $X.X shareholders on XX last declared per capital dividend Greenbrier dividends of dividends to Board billion Directors of

In million dividends, value. repurchase to be shareholder have we remaining, addition we'll to and shares authorization share create opportunistically of long-term repurchasing $XX

on Before providing emphasizing which year fiscal delivered led and during a surpassed it's expectations strong financial our we XXXX results finishing quarter, the worth to fourth note. guidance, the additional on color that

strategy multiyear our execute benefit diligent our our our demonstrate of strategic to plan. continue on believe the and focus results We

way well a million XXXX. of XX fiscal months on are starting point to ago. We doubling by $XXX revenue from recurring our is This

margins and target the We have achieved of close aggregate between invested on capital XX% to by XXXX. and are of the gross already XX% in fiscal mid-teens return our goal range

units. XXXX backlog I This with on includes XX,XXX the Brazil. Based and we railcar units fiscal combined of value and level approximately production that units of will plan our follows: shareholders. And I'll recent now effectively close X,XXX team, to With these commitment to diversified current execute Greenbrier-Maxion in comments results, outlook schedules, energy on XX,XXX and as our with deliver from new bullish significant Greenbrier's Greenbrier's knowing am robust is deliveries trends, guidance. our our

our railcar in not As between $X.XX is railcar flexible $X.XX that billion. a Brian restoration but new be billion mentioned, to portion for multiple accretive earnings, of we have is footprint expected deliveries. Revenue included to to to customers dedicated

also basis captures only fiscal activity We it margin on to sale. points expect but our chose how this incorporates X.X% percent administrative plan in We gross it to XX% in XXXX. XX.X% from expenses, through optimization not basis include grow guidance, lease fleet XX selling deliver we metric to and XX We our since gains reflected manage to to operating percent aggregate points margin to XX.X% to X.X%. from

For carryover in XXXX in-sourcing approximately some capital million expenditures, expect invest fiscal to Services. our $XXX million Maintenance which initiatives, spending will include from in and we $XX Manufacturing

are to closing, for gross $XXX we to our $XX are well as million Leasing into dedication expenditures results. pleased XXXX. sales performance planning manufactured capital are the that of expected in investment We around and equipment railcars and to with be very XXXX including was shareholders. in the attributed lease and around fleet year million. In full for of attention as our Services, Management Greenbrier's of were quarterly Proceeds transfers creating value in strong

the deliver about continued is future. And am Our we progressing and financial well. for that I questions. will is remain to it well open Greenbrier now we Together position Better is optimistic positioned value, up confident strong, and strategy our

come [Operator first with Susquehanna. Instructions] the Bascome And question from Majors will

flattish Looking into been year, the near just more North mean, tepid roughly there guiding to on mean, cycle had I based term orders. a that I you're concern be could some some next where little American industry us risk coverage opportunity different on give to you color backlog of markets there's here? bridge and us your through and any Can deliveries regions your maybe year-over-year. different and your

Yes. little in the the on a I It's bit color Thanks, give Brian. of backlog bridge. you Bascome. can

slowed. of So of back hot, has of seeing quite automotive that one products as And been in year. backlog products been the bit you has really mix the know, and a automotive been while some secured And shift hot other date. we've to half market. have boxcars the the a that's We're

providing really us what's the that's confidence providing that So with in we're the here guidance today.

we came Bascome, this significant say And averages. in line with visibility into already, with I that year would historical more

solid first see of So bit a the In in in space production spring more and X, from white well. the summertime. quite late X a year North in America, of months as Europe But visibility you very might have perspective. to are Brazil we

there mean, in that items we I improvement, bridge it officially there maybe about all that Or seem other all out? the close roughly to getting margin where And is to like together, from are you've think to guided piecing if range, it some below to this you're an should what $X does you is get line EPS? EPS but opportunity together, the with the --

Bascome, this is Lorie.

came we're to team And to that on. -- executing, XXXX. we we $X. doubt just I I mean, the I very shy will We as think you XXXX show can you're that of I that spot -- through have close and tell in XXXX be continue improvement way this no work is operating

least that's And speculative And that long-term of seems order Do in, last of moved XXXX? some leasing North America from or away in has change market permanent it the we come think at you see in from the a that issues? other back companies. piece, some reflective could

that a has large, community it's question. and the years It side few a by one reasons the exception going lessor been this of because to been past with that our the benefited of sidelines few. the really has, our strong other lease one lessors frankly, cost builders over there's Bascome, the of Greenbrier issue covet volatile, and business. Whether and the operating great capabilities or it's quite has the is rates on the operating lessors have has market. And and that the sure. been it contributed not why interest a But of we some capital long-term has to shift, of think Started where time. in very years COVID, sidelines. take then I activity it builders thing a during as up is X years, difficult that X where shown was probably was very itself I'm one care for of now on been it that to on between operating enough became match not origination

to economics So product or it hand, would leasing of the others. boost whether it in the But because deals erode they more come other not, in car they on tends potentially. have hands back new probably multiyear potentially

that helps hopefully, a bit. So you little

last few would over I that a what just just more I is years disciplined think And behavior... seen lot the add we've in

Yes.

the make the that North operating been And whether very boding and while we well think they very everyone. for big, have car lessors I market. seen the In side large on it's speculative in active, that's And the American orders, haven't secondary market. new

So I being market think just very overall the is active. quite disciplined. It's

Mr. This to will over back conclude to question-and-answer the conference session. our like I would turn

Please for ahead, sir. Justin Roberts go any remarks. closing

your for today. attention very you much and Thank time

If other you Have questions, investorrelations@gbrx.com. have day. any good please a reach follow-up to out

you concluded. conference for today's attending presentation. Thank now The has

You may now disconnect.